IRI Partners Blog

At Insurance Resources International, LLC (IRI), we have worked with dozens of
companies, both P&C Insurers and the companies in the Eco-System that provide
key products and services vital to the Insurance Industry.

Our blog features our views and occasionally those of our strategic partners and
guest bloggers. We strive to blog on topics relevant in your world and core to
delivering best in class process, product and service.

We are firm believers that while Insurance is a huge business, it is a small
community.

In this post, we will highlight some of what we think are some of the enduring trendsin the auto claimsspace of the P&C market. These include:

Lower Frequency

Using new technology in old ways

Focus on LAE in a vacuum vs. lowest ultimate cost

Strategic partnerships

Insurance industry as a fast follower vs., innovator

Finding people via referrals & “networks”

Some of these enduring trends are exogenous to specific insurers and will take time to play out, but insurers unwilling to look at and plan for the long term, will simply fail faster, accelerating the inevitable (and much needed) consolidation already beginning to occur.

I think we can all agree that technology, which is evolving at an ever increasing pace, has dramatically transformed the way financial services companies, including insurers, in many value add ways.

Just look at how the cycle time in auto insurance underwriting has been compressed from days to minutes, the auto damage estimating process has moved from hours to less than a half hour for most estimates. There are many more examples of how insurers are leveraging technology to deliver faster, smarter and more customer focused outputs.

While many of the examples of leveraging technology is the result of insurers and their vendor partners taking a specific process and developing new, technology enabled solutions, the place where insurers still struggle, a LOT, today is in delivering an efficient and effective technology overhaul when replacing an entire core system, say in claims or underwriting.

We have direct experience in several of these core system replacement initiatives. What we see, again and again, is well meaning people working very hard to fit their existing processes and develop the same outputs into the new system. This is the danger of using new technology in old ways.

Compounding this risk, most companies choose a core system, then bring in one of the big outside consulting companies to help develop the business requirements documentation (BRD) to code the system to the individual companies needs. While these intermediaries are great at taking what the current process SME’s articulate about the current process, they don't ask the hard questions about leveraging the technology to improve efficiency and effectiveness. They would have trouble even if asked, because they are not claims of underwriting experts. They have not done the job.

If you want to avoid using new technology in old ways, be sure to have people who have done the job asking hard questions, challenging current dogma and focusing on using new technology in new ways.